It’s that time of year again; Christmas lights are twinkling, office playlists are turning festive, and businesses everywhere are planning ways to celebrate the season.
But before you start buying mince pies or sending out client gifts, it’s worth knowing which festive costs you can claim as a business expense (and which ones could land you on the naughty list with HMRC).
At Jennison Accounting, we love helping clients save money, so here’s a quick guide to what’s allowable this Christmas.
1. The Staff Christmas Party
Yes, you can absolutely claim for your staff Christmas party, as long as you follow the rules.
HMRC allows an annual staff event (like a Christmas party or summer barbecue) to be an allowable expense if:
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It’s open to all employees (not just directors or senior staff),
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It costs £150 or less per person, and
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It’s an annual event (not a one-off treat).
That £150 includes food, drink, entertainment, venue hire, and even taxis home. Just remember, go over that £150 limit by even a pound, and the whole amount becomes taxable as a benefit in kind.
2. Client Gifts and Thank-Yous
A small token of appreciation for your clients can go a long way, and sometimes, it’s tax-deductible.
You can claim for client gifts if:
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Each gift costs £50 or less,
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It’s not food, drink, or tobacco, and
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It carries a clear business branding (like your logo).
Think branded notebooks, calendars, mugs, or stationery – festive but functional.
A bottle of prosecco? Unfortunately, that’s classed as entertainment and can’t be claimed.
3. Staff Gifts and Bonuses
If you’re giving your team a little extra cheer this year, you might be able to treat them without triggering extra tax.
You can give employees a ‘trivial benefit’ worth up to £50 per person, without reporting it to HMRC, as long as it’s:
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Not cash or a cash voucher,
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Not a reward for performance, and
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Not part of their contract.
So a festive hamper, a gift card, or a bottle of wine can all count as tax-free trivial benefits. Just make sure the gift is genuinely that, a nice surprise, not a disguised bonus.
4. Decorations and Festive Touches
Want to add some sparkle to your workspace? Decorations for your office, shop, or reception area are classed as business expenses. After all, they help maintain a pleasant working environment (and boost morale, too).
5. Charity Donations
The season of giving doesn’t have to hurt your bottom line. Donations to registered charities can be claimed as a business expense, provided they’re made directly from the company (and not in return for advertising or sponsorship).
If you do get something in return, like your logo on a charity event banner, that counts as marketing instead, which is also deductible. Either way, it’s a win-win.
6. Entertaining Clients – Proceed with Caution
While staff parties are fine, client entertainment is usually not tax-deductible. Meals, drinks, or hospitality you provide to clients can’t be claimed as a business expense, even if they help you win work or strengthen relationships.
It’s a grey area many businesses trip over, so if in doubt, check with your accountant before claiming.
Make the Most of Your Festive Spending
The Christmas season is a brilliant time to thank your team, delight your clients, and spread a little goodwill, and with the right knowledge, you can do it tax-efficiently too.
At Jennison Accounting, we’re here to make your finances simple, straightforward, and stress-free, even during the busiest time of year.
If you’d like help reviewing your festive expenses (or planning for the year ahead), get in touch with the team. We’ll help you stay compliant, save money, and go into 2026 with confidence.
